The latest sign of sluggishness in the world's No. 1 economy came from the Federal Reserve's regional survey, a report known as the ''beige book.'' The Fed said economic growth in the U.S. has been steady during the summer in some cities, but was slowing in others like Atlanta and Chicago.

Japan's Nikkei 225 stock average finished the morning session down 52.85 points, or 0.5 percent, to 9,700.42. Investors moved to lock in profits following a 2.7 percent jump the previous day.

Activity in the tech sector was dominated by reports that Panasonic Corp. plans to make Sanyo Electric Co. and Panasonic Electric Works Co. into full subsidiaries. Sanyo surged almost 27 percent. Shares of Panasonic tumbled 5.4 percent.

South Korea's Kospi fell 0.2 percent to 1,771.32 and Hong Kong's Hang Seng index lost 0.4 percent to 21,014.53. Australia's S&P/ASX 200 was down 0.4 percent to 4,510.4 on weakness in banks.

Markets in Taiwan and Singapore also fell while benchmarks in China, Indonesia and New Zealand were higher.

In New York Wednesday, the Dow Jones industrial average finished down 0.4 percent at 10,497.88.The broader Standard & Poor's 500 index fell 0.7 percent to 1,106.13, while the Nasdaq composite index fell 1 percent to 2,264.56.

In currencies, the dollar fell to 87.22 yen from 87.44 yen late Wednesday in New York. The euro rose slightly to $1.2999 from $1.2996.

Benchmark crude for September delivery was up 4 cents at $77.03 a barrel in electronic trading on the New York Mercantile Exchange. The contract dropped 51 cents to settle at $76.99 on Thursday.

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